USING MARKETING RESEARCH TO BUILD BRANDS

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As of 2011, Procter & Gamble (www.pg.com) delivered products to nearly 4.2 billion consumers in more than 180 countries around the world. Its portfolio of brands included 50 leadership brands that are some of the world’s most well-known household names. Its revenues amounted to $79.57 billion in 2010. The company began operations in the United States in 1837 and has continued to expand its global operations. The stated purpose of the company is to “provide products and services of superior quality and value that improve the lives of the world’s consumers.”

Over time, Procter & Gamble (P&G) has proven to be an innovator in creating brands and understanding consumers by making extensive use of marketing research. Building brands has been a cornerstone of P&G’s success. The marketers at P&G use marketing research to determine a brand’s equity and then make sure everyone understands it, because it drives every decision made about the brand. P&G always thinks about the consumer and why a particular product is relevant to the consumer. P&G always asks “What is in this for the consumer?” This strategy has served the company well. It believes in catering to the consumer. With that in mind, P&G has spent a tremendous amount of money, effort, and innovation on marketing research.

A focus group talking about a product is simply not enough; the marketers at P&G dig deeper to try to really understand consumer behaviors. Leonara Polonsky, the marketing director at P&G, describes the intensity with which P&G pursues its marketing research efforts. Some of these efforts include shopping with consumers and spending several hours in consumers’ homes. In fact, Polonsky describes her own experience at spending time at consumers’ homes in Caracas, making coffee with them and trying to understand how these consumers think about coffee. This marketing research initiative is an innovative approach that puts the consumer at the center of everything P&G does. P&G now thinks much more holistically about the consumer’s entire experience related to its brands, and so it pays much more attention, for example, to the in-store experience.

P&G’s basic marketing principles have not changed, but its methods of targeting and identifying consumers have changed to meet the increasingly complicated consumer base. In the early days, P&G would mass market through television and other sources, because this was the most effective strategy at the time. P&G has changed its key strategy from mass marketing to consumertargeting. According to Jim Stengel, P&G’s Global Marketing director, targeting is the future of brand marketing and brand building, because the better a company understands its market the better its marketing will be.

One of the areas that P&G constantly researches is the consumers’ in-store experience, viewing it as another way of connecting with consumers and making their experience better. One of the ways it does this is by partnering with retailers to develop in-store experiences to please consumers, which has become more difficult because consumers have less time and higher expectations.

P&G realizes that it is no longer possible to shout at consumers. It has to talk to them when they want to listen, and it is the consumers who choose the time and the place for this communication. That time and place, today, is increasingly becoming the Internet. An excellent example is the Pampers Web site, where caregivers can get helpful parenting information. The Pampers site is P&G’s way of connecting with consumers on their terms. All parents want information about babies, and Pampers provides information about babies. The Pampers’ Web site is not about selling diapers, but about helping parents understand their babies and answer questions about them. In the process, P&G also collects valuable marketing research information.

Sometimes new-product plans result from Internet marketing research. P&G has discovered that Internet research offers a more representative feel for consumer reactions, and P&G is leveraging the Internet and social media to understand consumers. This was the case when P&G decided to launch Crest White Strips not on television, but on the Internet. The Crest White Strips product launch was one of the most successful product launches in history.

The Pampers brand also presents an example of understanding brand equity; the brand has recently been redefined from one about absorption to one about baby development. Focus groups and surveys revealed that parents are very emotionally involved in the development of their babies. This simple but deep change from a functional equity to a broad emotional one has resulted in a whole different look for Pampers diapers, a whole different look in the advertising, a different media plan, and a totally new product plan.

P&G is always conducting marketing research to discover new ways to reach out to consumers, sometimes by developing new products and introducing new product categories. P&G invented disposable diapers, home dry-cleaning, and the very popular cleaning tool the Swiffer, which was designed after extensive marketing research. P&G marketing has been innovative and pioneering over the years, and one would expect the same from it in the future.

Conclusion:

The case presents P&G’s strong culture of understanding its consumers by conducting marketing research and innovating to meet their needs and desires. P&G, with its long and rich legacy, has continuously evolved newer ways to connect with its consumers and gain insights into their behavior. P&G has been adept at adopting newer technologies, such as the Internet, and leveraging marketing research to enhance its under-standing of its consumers. P&G is constantly using marketing research to solve the problems of today and to build brands that will continue to be leaders tomorrow.

Questions:

1. Discuss the role that marketing research can play in helping P&G build its various brands.

2. Define an appropriate marketing research problem corresponding to the management-decision problem you have identified.

3. P&G has developed a new toothpaste that provides tooth and gum protection for 24 hours after each brushing. It would like to determine consumers’ response to this new toothpaste before introducing it in the marketplace. If a survey is to be conducted to determine consumer preferences, which survey method should be used and why?

4. Illustrate the use of the primary type of scales in measuring consumer preferences for toothpaste brands.

5. If marketing research to determine consumer preferences for toothpaste brands were to be conducted in Latin America, how would the research process be different? (10 points)

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